Python stdout weirdness

gistfile1.pytb

japsu@eris ~ $ cat foo.py
#!/usr/bin/env python
# encoding: utf-8

import sys
sys.stdout.write(u"åöä\n")
japsu@eris ~ $ python foo.py
åöä
japsu@eris ~ $ python foo.py | cat
Traceback (most recent call last):
  File "foo.py", line 5, in <module>
    sys.stdout.write(u"åöä\n")
UnicodeEncodeError: 'ascii' codec can't encode characters in position 0-2: ordinal not in range(128)